The Property contains a tungsten skarn deposit; skarns are contact metasomatic deposits, exploited for tungsten, with accessory molybdenum, copper, tin and zinc.

The tungsten mineralisation of the Sangdong deposit is contained in several tabular, beddingconformable skarns in the Myobong Shale; these skarns have been interpreted as comprising carbonate-bearing horizons that were altered and mineralised by fluids ascending from the underlying Sangdong Granite.

From uppermost to lowermost, these horizons are termed the Hangingwall, Main, and Footwall horizons. Calc-silicate layers from 0.50 – 1.0m in thickness have developed on the upper and lower contacts of the Main and Footwall horizons.

The Hangingwall horizon is located near the upper contact of the Myobong shale and varies in thickness from approximately 5.0 to 30.0m because of the irregular boundary of the shale with the overlying Pungchon Limestone. This zone has a strike length of about 600m and a down-dip extent of about 800m. Above the most highly-altered portion of the Main horizon, the Hangingwall horizon is not tabular, but extends steeply and irregularly into the overlying limestone. The Hangingwall horizon contains diopside, garnet, fluorite, zoisite, quartz, hornblende, wollastonite and up to 50% calcite and although there is some zonal variation in mineral assemblages (diopside-, hornblende- and quartzrich zones) the zonation is not as well- developed as in the underlying Main horizon. The tungsten values show some zonation and decrease in value up-dip. The base of the Hangingwall horizon is approximately 14m above the upper contact of the Main horizon.

The Main horizon strikes about 100° and dips northerly between 15° and 30°. The strike length is in excess of 1,300m and thickness varies from 5.0 – 6.0m. Alteration (skarnification) within the Main horizon forms three concentric, roughly circular zones. A central quartz-rich zone consisting of muscovite, biotite, quartz and minor chlorite is about 350m in diameter and plunges down the Main horizon at N05°W and is coincident with the higher tungsten grade portion of the deposit. The central zone is succeeded outward by a hornblende-rich zone containing diopside, hornblende or tremolite, chlorite, fluorite and calcite. A diopside-rich zone occurs both horizontally beyond and stratigraphically above the hornblende-rich zone and contains garnet, diopside, quartz, fluorite, zoisite and plagioclase. The diopside zone is typically poorly-mineralised. Boundaries between these zones are diffuse and transitional.

The Footwall horizons comprise multiple layers: Footwall Zone 1 (F1) occurs 1m below the Main horizon and is approximately 2m thick; Footwall Zones 2 and 3 (F2, F3) are situated approximately 35.0 to 40.0m below the Main horizon and are less than 1m thick. Further Footwall Zones have been identified beyond F3 and are collectively referred to as F4. Areal dimensions of these horizons and the zonal distribution of calc-silicate minerals in them are similar to those of the Main horizon. F1 has sometimes been mined with extraction of the Main Zone. Some parts of F2 and F3 have been mined in the upper section of the mine.

The Sangdong deposit contains scheelite, minor wolframite, molybdenite, bismuthenite and native bismuth. Molybdenum also occurs in substitution with scheelite and about 30% of the molybdenum produced at Sangdong was scheelite-related. Gold and silver occur in association with bismuthinite and native bismuth and were recovered from the bismuth concentrate. Tellurides, arsenopyrite, pyrite, chalcopyrite and sphalerite also occur.

Mineralisation is largely associated with quartz veins within those horizons, with the exception of the central portion of the Hangingwall horizon. Quartz veins are most abundant within a central, quartzrich portion of the deposit, parallel to and discordant with the calc-silicate layering. Veining ranges from one to ten centimetres in width and is best developed in the lower portions of the mineralised horizons.

The abundance of scheelite within the mined portion of the Main horizon is concentrically zoned, increasing with alteration intensity, depending on temperature. Scheelite abundance in the Hangingwall horizon is more variable and less clearly concentrated in zones.

Molybdenum and bismuth are concentrically zoned in a similar pattern to tungsten in the Main horizon.

The area is cut by steeply north dipping reverse and normal faults which have resulted in offsets of the mineralised horizons by as much as 50-100m.

Sangdong East (“East WO3 Orebody") is located about 1km to the east from the Main deposit. It is essentially an extension of the main mine area, and stratigraphy and lithologies are similar. In contrast, however, the Hangingwall (Upper) horizon, Main horizon, and Footwall (Lower) horizons are thinner, and have a lower frequency of quartz veins. The constituent minerals are pyroxene and garnet with accessory plagioclase, quartz, apatite, hornblende and wollastonite.

In the Sangdong West area (“West WO3 Orebody"), mineralisation and stratigraphy are similar to the main Sangdong Mine, but skarn horizons are thinner, and there is a lower frequency of quartz veining than in the Main horizon. The vein width and grade of tungsten mineralisation do, however, increase northward to the Hwajeolchi area.

Based on the latest understanding of the orebody geometry and mining areas, and evaluation of the resources, including in-situ thickness variations, it was decided to apply two proposed mining methods:

- Mechanized Inclined Panel mining (MIP) – areas where the thickness less than 3 metres.
- Cut-and-Fill (CAF) – for areas where the thickness is greater than 3 metres.

The envisaged MIP method involves drifting on apparent dip, so as not to exceed a gradient of 15%, and so allow trackless equipment. The stope development is planned to be symmetrical, with panels being extended both up and down from access galleries.

This method is very flexible, in allowing working upwards or downwards, and conversion to cut-and-fill.

The sequencing of MIP stoping operations will be:
1. Development of level strike drives, the base transport gallery.
2. Ore Drifts will be developed oblique to strike drive, at a maximum gradient of 15%. These drifts will be 3m x 3m, and will spaced 12m apart, to form one side of each primary panel. These drives will be extended to the next upper or lower level, and so will have a strike length of approximately 175m.
3. The ore drives will be slashed out an additional width of 3m, to leave the primary panels 6m wide. For ore regions less than 3m in thickness, the slash height can be limited down to 1.5 m minimum.
4. When the primary panels are complete, fill barricades will be required at the base level of each panel. No barricade will be needed in downwardly developed panels, if they have no connected with the base strike drifts. The barricades can be constructed from waste piles, which are then shotcreted to prevent fill leakage.
5. The primary panel(s) can then be backfilled with paste backfill and cement. As the drifts are inclined this filling should end up tight to the back.
6. After curing the primary panels’ backfill, secondary panels can be mined out in the same way as the primaries. The backfilling of secondary stopes can be done with a reduced amount of cement.

In the slashing operation, dilution can be dramatically reduced, with parallel drilling to the ore structure, as well as a much reduced height. All drilling for these slashes can be inside the mineralized structure, with up to two blasts of 1.5 m width on the up-side. Dilution of 15% (maximum) on drifting and almost no dilution with slashing, should give a combined maximum dilution of 7.5 %, and an average dilution of approximately 5%.

Cut-and-Fill (CAF) Method.
This method will be applied to ore zone areas with a thickness of 3m and higher, up to 20m depending on the local ore thickness. It can be considered a simplification of the previous Inclined Panel Stoping, and in some areas it could also be adapted with uppers for extraction of panels up to 12m in height. One particular advantage of this method is the potential high selectivity, with separate removal of internal waste encountered.

From the strike drive, the primary panels are opened in the ore, perpendicular to the strike drive and developed across to the footwall contact. These panels wiil be inclined upwards, to a maximum gradient of 15% to assist with tightfilling during subsequent backfilling operations, and also to create longer stopes. Both primary and secondary panels are nominally planned to be 6m x 6m in cross-section.

After the backfilling of the entire first 6 m lift, access to the next 6m lift will be from the hanging-wall incline. Access to stope panels behind the incline will need to be done by the footwall strike drift. The backfilling will continue through the footwall strike drive, with multiple barricades in the primary stope panels and with two barricades per sector for secondary stope panels.

In the MIP mining, drilling will be done with single arm electric/hydraulic jumbos. Drill steels will be 3m, allowing an effective advance/blast of 2.1m in drifting, and 1.5m advance/blast in the slashing. Slashing lengths will be adapted to the local ore exposures ore blending requirements. The drive patterns will typically be a 600mm x 600 mm pattern, with an extra 9 burn-cut holes, 4 of which are reamed. The slash holes will be drilled on a 900 mm by 900 mm pattern. Perimeter holes may be drilled on a similar pattern, depending ground conditions.

In the CAF zones, drilling will be with two arm electric-hydraulic jumbos, that will have 3.6m rods, drilling 44 mm drillholes of 3.1 m length and an effective 2.6 m advance per blast. The burn cuts will have a similar pattern to MIP, and the remaining drillholes will have a pattern of 1m x 1m. Perimeter holes may be drilled on a similar pattern, depending on ground conditions.

The processing plant will have a capacity of 1,920 metric tons per day.

The main process steps for treating the Sangdong ore are primary, secondary and tertiary crushing and stockpiling; grinding; flotation divided into two (2) sub-circuits (sulphide flotation and tungsten flotation); thickening; filtration and packaging section; a waste water treatment
facility; and services section.

The run of mine (ROM) ore from the mine will be received in a feed hopper equipped with an inclined 600 mm square opening grizzly. A rock breaker will be used to bring the grizzly oversize down to 600 mm. The ore will be extracted from the feed hopper by an apron feeder which discharges onto a belt conveyor. The belt conveyor will feed a primary jaw crusher through a static grizzly feeder, which prevents the feeding of the fine fraction to the jaw. The jaw crusher discharge and the fine fraction will be conveyed by a 914 mm transfer belt conveyor.

The ore will be drawn from the coarse ore stockpile by one or two variable speed apron feeders. The feeders discharge onto a 914 mm belt conveyor carrying the ore to a Rod mill of 3.3 m diameter x 4.9 m long, driven by a variable speed 725 kW WR motor.

The Rod mill discharge will be classified through a cyclone cluster consisting of 10 cyclones of 250 mm diameter (9 in operation and 1 standby). The cyclones underflow will be reground in a ball mill of 4.2 m diameter x 4.6 m long, driven by a synchronous 1,400 kW WR motor.

The cyclone overflow, at a P80 of 75 microns, will be directed by gravity to the sulphide flotation circuit conditioning tank.

The pulp from the 7-minutes conditioning tank will be pumped to the sulphides rougher flotation bank (2+3 x 15 m3 cells for molybdenum roughing and 2+2 x 15 m3 for other sulphide roughing). The rougher concentrates will be pumped by vertical spindle pumps to the respective cleaner banks, each of 2 x 5 m3 cells. The cleaner concentrate is directed to the final tails pump box. The cleaner tails are combined with the rougher tails and pumped to a 20 m diameter inter-stage thickener. An inline sampler located in the sulphides floatation final tails, delivers a continuous rougher tail sample stream for analysis.

The thickener underflow at 55% solids is pumped to the 11-minute two (2) conditioning tanks. In the first conditioning tank, the pH will be adjusted with lime and reagents will be added, while in the second conditioning tank (dilution tank), process water is added to adjust the solid density at 35%, suitable for the flotation process. The diluted pulp is pumped to the rougher flotation bank (2+2) x 15 m3 cells.

The rougher tails are directed to the scavenger banks 1 and 2, each (2+2) x 15 m3 cells. The rougher concentrate is pumped by a vertical spindle pump to the 1st cleaner bank 3 x 10 m3 cells. The scavenger concentrate is combined with the 1st cleaner’ tails and returned to the conditioning tank ahead of the tungsten flotation circuit. The 1st cleaner concentrate is further cleaned in the 2nd cleaner bank (3 x 5 m3 cells). The 2nd cleaners’ tails are returned to the 1st cleaner bank.

The tungsten concentrate obtained after the primary flotation stages requires to be further upgraded to reach the marketable grade of 65% WO3. The tungsten primary concentrate at 30% solids is thickened in an 8 m diameter thickener. The thickener under flow at 60% solids is pumped to a series of 8 x 1 m3 heated carousel type agitated tank. After the conditioning step, the pulp is diluted at 18% solids and pumped to a rougher and 3 stage scavenger circuit with each stage consisting of 2 x 5 m3 cells.

The scavenger concentrates are returned (countercurrent) to the heated conditioning tank. The rougher concentrate is pumped by a vertical spindle pump to three stages of cleaning cells, respectively 2 x 3 m3 cells, 2 x 0.8 m3 and 2 x 0.8 m3. All of the cleaner tails are returned, countercurrent to the heated conditioning tank.

The scavenger tails which stand as middlings are stocked to be retreated. The tungsten final concentrate is filtered and dried on a 1.2 m diameter x 1.2 m long drum filter. The filter cake is dried in a Holoflite rotary drier and tungsten concentrate with moisture of 3% is conveyed to a 50t capacity silo. A big bag filling equipment with a scale for tungsten concentrate packaging is installed under the silo.

The process water for the mill will be a combination of mine water (28 m3/h), abstracted river water (30 m3/h maximum) and treated recycled water.

In the scheelite (tungsten) flotation circuit, calcium and magnesium will be replaced by sodium, which increases the salinity of the water. If this water is recycled, the salinity will increase continuously (if not treated) and result in increased equipment corrosion and a decrease in froth stability (as the salinity decreases the ability of the process to produce foam). Therefore, the sulphide-molybdenum flotation circuit will use recycled water from the process water treatment facility, while the scheelite flotation circuit will use a combination of fresh process water and scheelite flotation circuit recycled water, while maintaining the optimal water salinity for the scheelite flotation circuit operation.